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During these trying times, we often think about the people and businesses that have been affected by the slowdown in our economy. Churches are not exempt from the crisis, either.

Just about every church is feeling the downward trend in giving from their parishioners and members.

What can and should a church do? Several steps should be considered.

1. Establish a realistic operating budget and follow it. The foundation for your operating budget should be the previous year’s actual expenses and the expected revenue for the current year.

The expected revenue is a reflection of the economic trends. How does the percentage decrease compare to the previous year? This percent may change several times throughout the year, requiring the budget to be evaluated and adjusted each time. The accounting system should reflect the actual dollars spent against the budgeted amount to be spent and show either positive or negative variances. This allows the church to monitor and control the expenses.

2. Evaluate the mortgage or lease. Can the mortgage be refinanced, either by a longer period or lower interest rate? Or if the church is renting a permanent facility, can the lease agreement be amended?
Because building expenses are such a large portion of the budget, any change could be significant.

3. Constantly educate and inform members. Most church leaders do not like talking about church finances because they feel they are invading territories they should not. However, if the church is being responsive to the needs of its members and the economic conditions, most church members recognize that their church is experiencing the same hardships and in some cases are willing to stretch their budget to help a little more with the church.

4. Create an opportunity for members to give from their abundance. Establish a “pay-off the mortgage fund” or an emergency fund, whereby members can give extra monies for a specific purpose: to help pay off the mortgage or for an emergency fund to be used by the church.

5. Examine the invoices being paid by the church. Is Florida sales tax included on the invoice? The church is exempt from all sales taxes. This includes sales taxes on such items as electrical power, all supplies, rental equipment (copiers) and telephones. By the way, any sales tax paid in error can be refunded to the church.

6. Evaluate the insurance needs, both property and group health. There is a multitude of group-health-insurance programs available in today’s market. Group-health-insurance companies are being aggressive, and if the church has not recently requested quotes on the health-insurance program, there is probably a savings that could be enjoyed — the same with property insurance.

7. Do you have employees or leased employees? Many churches have switched from an employer to leasing their employees. The church still maintains control of the position but no longer must prepare weekly payrolls, make payroll tax deposits and prepare monthly, quarterly or annual tax returns. The difference in costs, a payroll fee versus a full-time or part-time payroll clerk, could be substantial. Plus, headaches are eliminated with all the deposit requirements and preparing and filing the returns.

8. Evaluate the ministries of the church. The number of church members who are hurting financially has increased to portions not seen in years. Part of the evaluation process that churches are presently undertaking should include their ministries.

Most of all, the church must be viewed, by their members, as being responsible with all the funds that are being given.

Gerald Pankow is a resident of Lakewood Ranch and CEO and founder of Church Accounting Services of Florida.